Democratically governed companies are best equipped to withstand the AI tsunami that is coming our way
Tim Brys published this article in De Standaard with Jan Rosier (UCD), Stijn Dieusaert (Accende) and Nick Van Langendonck (Unbossers).
Mixed opinions on the impact of AI
‘Half of all junior white-collar jobs could be wiped out in the next 1 to 5 years,’ says Dario Amodei, CEO of Anthropic, one of the companies at the forefront of AI development. He hopes to wake the world up to the impending job apocalypse. Or maybe he’s just trying to hype up the power of his AI. Probably both.
Other CEOs, such as Jensen Huang of chip giant Nvidia, see things differently: AI will actually create a huge number of jobs. Huang challenges everyone to learn to work with AI, because ‘you won’t lose your job to AI, but to someone who works with AI.’ Amazon CEO Andy Jassy is neither here nor there: he advises his employees to ‘be curious about AI’ and says that his workforce will shrink in the coming years because of AI.
Studies suggest that fewer and fewer graduates are being hired in the US, partly due to AI; at large tech companies, this figure is as high as 25 per cent fewer hires. Paradoxically, IT is one of the sectors most affected. Google claims that 25 per cent of its programming code is already written by AI, while at Microsoft the figure is 30 per cent.
Regardless of the exact scale of job losses, we must bear in mind that new innovations can disrupt the labour market in unprecedented ways. Where this disruption is already taking place, it seems to be largely driven by the interests of wealthy shareholders. Employees must adapt or be left behind. According to a survey, two-thirds of companies in the US are experiencing conflict between employees and management over AI strategy.
Catholic social teaching
Why does the importance of capital providers often outweigh that of labour providers? Without employees, companies cannot (yet) exist. And “work” is not just a means to profit, with the employee as a radar in the shareholder’s money machine.
Catholic social teaching states that work is an end in itself: it is essential for the self-fulfilment of the employee.
Since the first industrial revolution, trade unions have been trying to create a better balance of power between shareholders and employees. They have achieved a great deal: improved working conditions and less inequality in society. However, they sometimes resort to blackmail: either out of powerlessness, because employee participation in companies remains too limited, or out of lust for power, when they lose sight of the interests of employees as self-perpetuating bastions of power.
The current AI-driven fourth industrial revolution raises the question: how can this be improved? What if we gave trade unions more power, but put employees at the helm alongside capital investors? In other words, what if we democratised companies?
Before the Enlightenment, the monarch was accountable to no one, because he ruled by divine right. The people were not worthy of governing themselves. When the rise of democracy established self-government for the people, it did not create utopias. Nevertheless, democratic societies became, on average, richer, less corrupt and less warlike.
It is sometimes argued that employees are unsuitable for participating in the management of a company because they do not have sufficient knowledge of economic reality. But top managers are not divine emissaries either: their knowledge is also limited and coloured by personal experiences. Could democratisation – allowing employees to have a say – make companies richer and more socially relevant, just as it has done in political democratisation?
Two-chamber system
There are dozens of successful international examples of democratically governed companies. In Belgium, there are Teal Partners, an IT company in Antwerp without managers, and Daddy Kate, a printing company in Sint-Pieters-Leeuw. Both allow employees to share in the profits and have a say in investments, projects and recruitment.
Involving employees in the management of companies can ensure that they take their social responsibility more seriously. After all, employees do not want “flexible” jobs, but demand respect for the dignity of their families, their communities and their natural environment.
Julie Battilana of Harvard Business School and Isabelle Ferreras of UCL argue that if employees remain excluded from decision-making, the short-term interests of capital investors will continue to prevail. Ferreras herself proposes a democratic bicameral system: one chamber for the usual board of directors representing the owners and one chamber for employee representatives, with both chambers having equal governing power.
Democratisation seems to be the next important step in the progress we have already made since the first industrial revolution. Exactly what this democratisation should look like is not immediately clear; experimentation will be necessary. But if employees are a company’s “most important asset”, it seems essential that they be allowed to participate in strategic decisions. Now that AI threatens to radically change the workplace, the issue is becoming even more pressing. Because only together can employees and shareholders steer this tsunami in the right direction.
We’d love to hear how this resonates with you and what it looks like in your own work environment. And of course, you’re warmly invited to send me your own question or join one of our Long Table Dinners, where we gather around meaningful conversations like this with peers from diverse backgrounds.
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With gratitude.
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